Ideagora, a Marketplace for Minds

Ideas and innovations are increasingly coming from outside company walls—and Web-based virtual talent pools are stepping in to fill the need

by Don Tapscott and Anthony D. Williams

As the late-19th century chemist and microbiologist Louis Pasteur famously said, chance favors the prepared mind. The same could be said of innovation. Companies face tough dilemmas everyday for which there is, somewhere, a uniquely prepared mind—someone with the right combination of expertise and experience to solve the problem. Conventional wisdom says companies should find those people, hire them, and retain them with money or perks.

But today, a growing marketplace for ideas, innovations, and uniquely qualified minds is changing the long-standing rules of innovation and talent management. Companies seeking solutions to seemingly insoluble problems can tap the insights of hundreds of thousands of enterprising scientists without having to employ everybody full-time. This shift is rippling through Corporate America and changing the way companies invent and develop products and services.

Today's competitive reality is that mature companies can't keep up with the speed of innovation or the demands for growth by relying on internal capabilities alone. For a $70 billion company like P&G, organic growth of 6%, for example, would require building a profitable new $4 billion business every year!

For years, companies pursued acquisitions, alliances, joint ventures, and selective outsourcing in the quest to please shareholders. But today, these conventional tools are simply too rigid, and not scalable enough, to drive growth and innovation at a level that will make companies truly competitive.

In contrast, ideagoras - places where millions of ideas and solutions change hands in something akin to an eBay for innovation - create a vibrant marketplace of connections in which companies can leverage other people's talents, ideas, and assets quickly and move on. What's more, the pool of talent at their disposal vastly exceeds what one company could hope to marshal internally.

The second reason is the changing talent landscape. The talent required to lead path-breaking innovation will increasingly reside in locations such as Brazil, China, India, and Eastern Europe, largely because a seismic demographic transition unfolding today places the locus of growth in the global economy (both in terms of consumer demand and the supply of highly skilled knowledge workers) squarely in these developing markets.

What's more, many of the brightest researchers want to work outside the confines of traditional enterprises. P&G figures that for every one of the 9,000 top-notch scientists inside its labs, there are another 200 outside who are just as good. That's a total of 1.8 million people whose talents it could potentially tap into. So smart companies are treating the world as their R&D department and using ideagoras to seek out ideas, innovations, and uniquely qualified minds on a global basis.

Though today's nascent ideagoras have yet to reach eBay-like proportions, companies such as InnoCentive, yet2.com, Nine Sigma, YourEncore and many other new marketplaces that link problems with problem-solvers, have planted the seeds for a sea change in innovation. They could arguably spur even more profound changes if services such as InnoCentive looked and behaved a little bit more like the open source software community. For the time being, InnoCentive solvers don't naturally coalesce into large groups focused on collaborating to solve a single problem. Nor does InnoCentive offer the openness and transparency of open-source software. Seeker businesses can cloak their identities, and solvers may never get personal credit for their contributions.

Indeed, where innovation problems are highly integrated, it may be preferable to offer problems to skilled external teams rather than, or in addition to, posting them in an open market.

Ideagoras like InnoCentive and TopCoder offer companies access to a wealth of new ideas and uniquely qualified minds, but learning how to tap the potential of a global ideagora means turning the R&D organization on its head. Companies would no longer invent first and ask questions later. They would ask, "What do our customers really need?" and then scout the "eBay for innovation" for the necessary inventions and technologies.

R&D labs would be ambidextrous: building on core capabilities internally, while acquiring the greatest, most complementary ideas externally. The deep-rooted "plan and push" modality would give way to a new approach to innovation in which companies engage and co-create with the best available talent.

These changes won't be easy or automatic. For starters, companies need new capabilities to create, transfer, assemble, integrate, and exploit knowledge assets. Sensing external opportunities is just the beginning. The really hard work starts with conceiving the ultimate customer offerings, and then executing smart decisions about acquiring intellectual property and partners to design, assemble, and deliver the final value. As P&G's Larry Huston reminds us, "Once an external idea gets into the development pipeline, it still needs R&D, manufacturing, market research, marketing, and other functions pulling for it."

It's no surprise that smart people remain as valuable as ever, if not more so, in today's economy. But for smart companies, the notion that you have to motivate, develop, and retain all of your best people internally is old. Of course, you will still need great internal talent. But increasingly, assume that many of the best people are to be found outside your corporate walls. With an eBay for innovation, however, a massive reservoir of talent would be a few clicks away.

BusinessWeek, February 15^th, 2007

17. Explain the following.

8. chance favors the prepared mind

9. conventional wisdom says

10. mature companies

11. something akin to eBay for innovation

12. to leverage other people’s talents

13. locus of growth

14. to tap into the pool of talent

15. to cloak one’s identity

16. R&D labs would be ambidextrous

17. the deep-rooted "plan and push" modality

18. Suggest your definitions for

• outsourcing -

• opensourcing -

• crowdsourcing -

TRANSLATION

19. Translate text 2 “Get Creative” into Russian in writing (up to the words “Today all kinds of blue-chip CEOs are signing on to creativity.”

20. Translate text 3 “A Dark Art No More” into Russian in writing.

21. Translate text 4 “Ideagora, a Marketplace for Minds” into Russian orally

22. Render the text in English.

Инновации Сегодня — Не Такие, Как Вчера

Распространено мнение, что инновации— сфера высоких и сверхточных технологий. Это суперкомпьютеры, Кремниевые долины, ученые в белых халатах, наукоемкие разработки, большие капиталовложения. Отчасти это действительно так. Но в первую очередь это нововведения и творческий подход к определению даже самых простых производственных решений. Плюс мобильность и гибкость бизнеса.

Компания IBM объявила о новой стратегии в области инноваций в сфере бизнеса и технологий. В IBM отмечают, что в быстро меняющемся современном мире само понятие «инновация» претерпевает изменения. «Инновация — это социальный, а не технологический феномен, он возникает на пересечении изобретательства и познания сути бизнеса», — говорит глава IBM Сэм Пальмизано. Это подтверждают и результаты проведенного опроса глав предприятий IBM Global CEO Study 2006, в котором приняли участие 765 руководителей ведущих компаний всего мира, представляющих 20 отраслей экономики.

Только 14% руководителей указали на внутренние научные исследования как на источник новых идей. 41% основным их источником считают собственных сотрудников, 38% — бизнес-партнеров и 36% — клиентов.

Еще два года назад в ходе аналогичного исследования большинство руководителей отметили, что основное внимание в их компаниях уделяется не снижению затрат, а созданию условий для роста и увеличения прибыли. Однако сделать это прежними методами вряд ли возможно. 65% участников опроса этого года заявили, что их фирмам нужны радикальные перемены.

Усиление конкуренции на рынке ведет к снижению прибыльности продуктов и услуг — так, цена за новую модель мобильного телефона в среднем за год снижается на 40%, а рост числа авиакомпаний приводит к снижению доходов, получаемых компаниями с каждого пассажира. Большую роль играет снижение лояльности потребителей — чем больше информации о продуктах и услугах им доступно, тем чаще они «изменяют» тем поставщикам, чью продукцию обычно приобретают. Потребителям требуют все больше дополнительных услуг — так, более 56% пользователей сотовых телефонов хотят иметь в этом устройстве камеру, почтовый клиент, чаты, календарь, музыку и даже фонарик. А каждый восьмой пользователь (12%) готов платить 10 долларов ежемесячно за телевизионные сервисы на мобильном телефоне.

Все это, принимая во внимание непредсказуемость ряда факторов, влияющих на мировой рынок (например, цены на нефть), приводит к ужесточению рыночных условий для каждой конкретной компании. А выживает и остается прибыльным, как известно, сильнейший, что означает умение максимально быстро находить все новые конкурентные преимущества, прежде всего, на ниве инноваций.

Что же мешает компаниям становиться инновационными? 35% опрошенных главной преградой называют недостаточный уровень корпоративной культуры и несоответствующий корпоративный климат, а в числе внешних помех 32% указали на правительственные и правовые ограничения.

Почти половина опрошенных компаний хочет быть инновационными в области продуктов и услуг, треть — в области организационной структуры, бизнес-процессов и бизнес-моделей. При этом анализ результатов деятельности различных компаний, по данным IBM, показывает, что наиболее экономически выгодными оказываются инновации в области бизнес-моделей компаний, что позволяет значительно увеличивать прибыль, в то время как традиционные инновации в продуктах, услугах и поиске новых рынков позволяют только сохранять уровень прибылей стабильным.

Оказалось, что компании, наиболее быстро увеличивающие свою операционную прибыль, уделяют вдвое большее внимание таким инновациям. Исследование выявило, что наиболее эффективный путь — развивать инновации в области бизнес-моделей через стратегическое партнерство.

На практике инновации в бизнес-моделях компаний чаще всего (67%) оказываются изменениями в организационной структуре и налаживанием стратегических отношений с партнерами (52%). Общение с внешним миром оказывается самым эффективным источником новых идей — так, компании с более высокими доходами на 30% больше идей черпают у партнеров и клиентов, нежели их менее успешные конкуренты.

Что же предлагает IBM? В области менеджмента IBM советует обратить внимание на изменение, по сравнению с 90-ми годами прошлого века, самой стратегии развития бизнеса. Децентрализованное производство, сетевые технологии, аутсорсинг, мобильность сотрудников — все это меняет понятие о том, что такое компания.

Так, еще совсем недавно считалось правильным выделить ключевые и непрофильные направления деятельности и концентрировать усилия на ключевых, отдав остальные, например, на аутсорсинг. Сейчас в условиях быстро меняющегося рынка более выгодным оказывается «разбиение» компании на ряд специализированных единиц, которые относительно свободны, могут взаимодействовать между собой и быстро реагировать на изменения. Такая гибкая и дифференцированная структура оказывается более стабильной и устойчивой к кризисам.

От менеджера в новых условиях требуются умение быстро учиться и адаптироваться, находить нестандартные способы поведения в различных ситуациях, не забывать о том, что в наибольшей степени повысить производительность труда любого работника может его отношение к работе как к увлекательной игре.

И, наконец, главная идея — шире смотреть на само понятие инновации и не рассматривать его как синоним научно-исследовательских изысканий. Инновации — это экономически выгодные творческие идеи

CRN/RE («ИТ-бизнес») № 7 (252), 6 мая 2006

LISTENING AND VIEWING

23. Listen to the interview withVijay Vaitheeswaran of The Economist and answer the following questions.

1. What is the real essence of innovation process?

2. What are the driving forces of innovation?

3. What external factors are pushing innovation in car industry? In what way is this innovation process disruptive? What economic interests are at stake?

4. What other examples of disruptive innovations are mentioned by the speaker?

5. What countries are named as disruptive innovators of the developing world and why? What is their impact on innovation processes in multinationals and companies of developed economies?

6. What part does the government innovation policy play nowadays?

7. What does the open approach to innovation imply? What are its main causes and effects?

8. What is the speaker’s definition of innovation notion?

9. How should the filtering process in an open model be arranged? What is meant by “fast failing”?

24. Listen to the group of executives discussing a new product. Make sure you understand the meanings of the following idioms. You may need to consult your dictionary.

• to come up with a winner

• a blockbuster

• bells and whistles

• to fast track a project

• stocking stuffer

• a big win

• to make a killing

• to keep something under wraps

• mum’s the word

• to get wind of

• to rip off

• game plan

• to get something off the ground

Here are some more idioms commonly used to speak about innovations. Match them with definitions and use in the sentences of your own.

1. to think out of the box	a. to produce good results, to succeed
2. to push the envelope	b. idealistic or visionary and without practical application
3. to generate lots of buzz	c. to innovate, or go beyond commonly accepted boundaries
4. blue-sky thinking	d. to think differently, unconventionally, from a new perspective
5. to make a go of smth	e. to cause many people to start talking about a product or service, usually in a positive way that increases sales

LANGUAGE FOCUS

25. Make up a list of collocations Verb + Adjective + Noun; Verb + Noun; Adjective + Noun

NOUN	ADJECTIVE	VERB
innovation	efficient	analyze
invention	useless	carry out
research	revolutionary	come up with
development	feasible	conduct
discovery	viable	harness
exploration	ground-breaking	foster
idea	impractical	stifle
creativity	ingenious	brainstorm
ingenuity	conventional	tackle
experiment	pointless	nurture
project	ridiculous	share
inspiration	superficial	apply
expertise	cutting-edge	put forward
knowledge	sophisticated	encourage
problem	creative	spur
solution	divine	disrupt
test	grueling	lack
design	intellectual	tap into
talent	prodigious	patent

26. Suggest the Russian for the following word combinations.

truly differentiating new-product breakthroughs; disruptive innovation; sustaining innovations; to be blasted out of the market; incremental improvements; product cycle; continuous innovation; to stifle the spread of new ideas; to add to shareholder value; to embrace new forms of innovation; to strip out transport and inventory costs from the production process; to hive off a project into independent business; to harness creativity; to generate top-line growth; commoditization of knowledge; to think outside the box; consumer-centric innovation; paradigm shifting; to outperform industry rivals; to conceive new products; to improve the bottom line; organic growth; to place big bets; to spur creativity; to visualize concepts; to discard concepts; basic tenets of corporate strategy; to anoint chief innovation officers; to nurture innovation; incumbents; to co-opt and pre-empt disruptive ideas; expertise; to leverage ideas and assets path-breaking innovation; top-notch scientists; to get personal credit for one’s contribution; to fast track a project; bells and whistles; a blockbuster; to foster creativity; a think-tank; Knowledge economy; human ingenuity; a zero-sum game; in-house R&D; network innovation; open source innovation; serendipity.

27. Match the synonyms.

1. to stumble across	a. to advance, to make a lot of pro-gress quickly
2. to stifle	b. to disorder
3. to hive off	c. to suggest, to bring to mind
4. to disrupt	d. to dispose of, to abandon, to reject
5. to blast out	e. to maintain, to uphold
6. to sustain	f. to pursue, to trail
7. to chase	g. to hinder, to impede
8. to evoke	h. to envisage, to conjure up
9. to conceive	i. to spin off
10. to forge ahead	j. to care for, to cultivate
11. to discard	k. to chance upon
12. to harness	l. to force out
13. to foster	m. to encourage, to promote
14. to nurture	n. to exploit, to yoke

28. Fill in the blanks with appropriate words and word combinations.

Knowledge economy	open approach	to innovate
to pick up	generation and handling	organic changes
gadgets and gizmos	intellectual capital	to tap into
invention	human ingenuity	breakthrough
novelty	a zero-sum game	R&D organizations
concept	think tank	corporate research
to outperform	new technology	popular notion

What is innovation? Although the term is often used to refer to [_________] many innovations are neither new nor involve new technology. The self-service [_________] of fast-food popularised by McDonald's, for instance, involved running a restaurant in a different way rather than making a technological [________]. However, innovation can involve plenty of clever [________].

One way to arrive at a useful definition is to rule out what innovation is not. It is not [________]. New products might be an important part of the process, but they are not the essence of it. These days much innovation happens in processes and services. [_________] of some sort does matter, although it might involve an existing idea from another industry or country.

The OECD, a [_________] for rich countries, says innovation can be defined as “new products, business processes and [________] that create wealth or social welfare.”

According to [________], innovation is something that men wearing white coats in laboratories do. And that's the way it used to be. Companies set up vertically integrated [_________] and governments fussed over innovation policies to help them succeed. This approach had successes and many companies still spend pots of money on [________]. But firms are growing increasingly disenchanted because the process is slow and insular.

Now the centrally planned approach is giving way to the more democratic, even joyously anarchic, new model of innovation. Clever ideas have always been everywhere, of course, but companies were often too closed to [________] them. The move to an [________] to innovation is far more promising.

So why does the [________] of ideas matter so much? Studies show that a large and rising share of growth—and with it living standards—over recent decades is the result of innovation. Innovative firms also tend to [________] their peers. With manufacturing now barely a fifth of economic activity in rich countries, the [_________] is becoming more important. Indeed, rich countries may not be able to compete with rivals offering low-cost products and services if they do not learn [________] better and faster.

But even if innovation is the key to global competitiveness, it is not necessarily a

[________]. On the contrary, because the well of [________] is bottomless, innovation strategies that [________] hitherto neglected [________] and connect it better with financial capital can help both rich and poor countries prosper.

29. Explain the meanings of the following terms

• break-through inventions

• incremental innovation

• sustaining innovation

• disruptive innovation

• radical innovation

• blockbuster new products

• operational innovation

• strategic innovation

• user-centric innovation

• in-house R&D

• network innovation

• open source innovation

HAVE YOUR SAY

30. There are many mistaken views about how innovation works. Here are some of the most pervasive. Suggest your counterarguments.

1. Innovation is all about technology.

2. Innovation is about crazy creativity.

3. More resources equal more innovation.

4. Innovation is expensive and takes time.

5. Only a big bang / a hot new product counts as a success.

6. Innovation – and the growth that results from it – is serendipitous and unpredictable.

7. Innovation is intrinsic and can’t be taught.

8. You need hundreds of ideas because the failure rate for innovation is high.

It matters

31. Search the Internet for some successful examples of

user-centric innovation operational innovation		strategic innovation open-sourcing
	BUSINESS SKILLS

32. Write a 150 word report to describe the information given in the charts. You are not asked to give your opinion. (Portfolio entry)

Use two standard opening sentences to introduce the graph and your report. These opening sentences should make up the first paragraph. Sentence one should define what the graph is about, that is the date, location, what is being described in the graph etc. Notice that in a single line graph we say “the graph shows…” but with several lines we can more accurately say “the graph compares…” Sentence two might sum up the overall trend: “It can be easily seen from the chart that….”

The body of the report will describe the graph or graphs in detail. Line graphs usually present information in chronological order and so the most logical order for you to write up the information would also be from earliest to latest. Bar graphs, pie charts, etc are organized in different ways and so you need to decide on the organization of each one. Your report should end with one or two sentences which summarise your report or draw a relevant conclusion.

Pie charts generally show figures in percentages and your language in writing the report should reflect this. You will probably talk about “percentage”, “proportion”, or “share”. You may also use the expressions “to account for” or “to make up”. Use comparatives and superlatives to compare and contrast.

33. Write an argumentative letter to The Economist editor nominating some new blockbuster and its developer for The Economist Annual Innovation Award in one of the following categories. (Portfolio entry)

• Bioscience (pharmaceuticals, biotechnology, agriculture)

• Business processes: enabling compounds, products, technologies or methodologies which underpin product discovery, design, or manufacturing, as well as fulfillment processes

• Energy and the environment: includes energy, transportation, automotive

• Social and economic innovation: novel technologies and business models that improve everyday lives (eg, microcredit)

• Computing and telecommunications: includes hardware, software, security, telecommunications

• Consumer products: may include the product, process, media or design

• “No boundaries”: technology-based products or services that don't fit neatly into any of the above categories (this includes materials science, nanotechnology and other emerging fields, eg, blue-violet laser)

Mention the main characteristics, functions, selling points, possibility for customization, comparison with competitors’ products.

34. Make mini-presentations on the following topics. (Portfolio entry)

1. The age of mass innovation. Consumers as creators.

2. In-house vs. open-source innovation.

3. The most innovative company of our days.

4. Smart companies take on “intrapreneurial” spirit (lessons from Apple).

5. Kaizen Blitz: a powerful tool for operational innovation.

6. The yin and yang of discipline and imagination (efficiency vs. creativity).

7. Reaping rewards from Linux.

HUNGRY MINDS

35. For further information on the recent trends in corporate innovation process read 1) The Economist Special Report “Innovation”, October 11^th2007 2) Business Week Special Report “Wikinomics”, February 15^th, 2007.

GET REAL

36. Read the following article and express your own opinion on the issues raised in it. Find the like-minded fellows among your group peers. In groups of three or four do a 5-minute brainstorming session to come up with recommendations on how to manage the creatives. Suggest your comments on the headline.

Wielding the Velvet Hammer

by Jack and Suzy Welch (abridged)

Do the creatives in an organization need special handling?

Leading people who often don't think of themselves as employees of anyone or anything is an art, drawing on all sorts of soft skills, like empathy, an ability to nurture, and ad hoc psychological counseling. You don't want your resident out-of-the-box thinkers running for the exits. With their fresh ideas and unique perspectives, they can be, and often are, the reason for breakthrough products and new ways of working, and even the impetus for whole new businesses. The conventional wisdom about managing creatives runs that writers, editors, artists, software designers, engineers, research scientists, and even a few particularly inventive investment bankers should be left alone. They're different from you and me, the thinking goes: deeper, more mysteriously wired, more fragile. Treat them like worker bees, and they sting. Treat them like hallowed Yodas , and their wisdom flows. On the other hand the most creative people can often be intellectually complex and emotionally delicate. They can be odd or prickly. Some are quite antisocial. Many started hating the status quo in grade school and have never stopped. Who knows whether those traits are due to the way their brains work or the way most societies allow (and even encourage) artistic types to act. Regardless, true creatives do seem to shut down when squeezed into normal strictures, and good managers need to be wary of that.

But too often, companies also contain those who are so exquisitely talented that their buck-the-system behaviors get a pass. The brilliant scientist who treats his young associates like serfs. The award-winning art director who scoffs at corporate pleas for cost-cutting. The ingenious video game designer who won't talk to the marketing department. They seize upon any opportunity to break from the corporate herd. People start working when and where they want, which usually means alone. They stop sharing ideas with mainstream "grunts." Often, they start sniping at each other over, of all things, creative differences.

Outrageous behaviors, yes. But when the creatives displaying them are good enough, many managers look away. Who wants to drive off the goose that lays the golden eggs? This often leaves leaders in a unique, but not irresolvable, bind.

BusinessWeek, September 24^th, 2007

What would you do under the circumstances?

Note

Yodais a fictional character from the Star Wars universe. Yoda is portrayed as a wise and powerful Jedi Master. Yoda's race has never been stated in any media, canonical or otherwise, and he is merely stated to be of a "mysterious species"

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